Dan Shugar, founder and CEO of solar tracking company NEXTracker, has had an illustrious career. Despite the tumultuousness of the solar industry, Shugar has led numerous companies to great success — across sectors as diverse as C&I solar installation and module and tracker manufacturing. Add to that the fact that he has seen the industry’s growth and evolution firsthand since the 1980s, and it’s clear that Shugar has a wealth of industry insights.

After starting his career as a transmission planner at California utility PG&E, Shugar transitioned to PG&E’s R&D department in 1988 where his passion for photovoltaics was ignited. He was fascinated by the idea that something with no moving parts could produce energy with just the light of the sun. He later led research that demonstrated how solar could offer benefits to the electric grid — which contributed to the development of net metering policies.

Shugar went on to serve as president of PowerLight Corporation, which became the largest commercial installer in the U.S., and then President of SunPower, which acquired PowerLight in 2007. He served as CEO of PV manufacturer Solaria prior to founding NEXTracker in 2013.

Aurora content marketer Gwen Brown and chief of staff Sunny Wang had the pleasure of interviewing Dan Shugar at NEXTracker’s offices in Fremont, California. Read on to hear Shugar’s thoughts on how solar business dynamics have evolved, where innovation can further reduce the cost of solar and how to build a successful company and innovative team!

Aurora Solar: Having been involved in solar since the early days of the industry, you’ve seen a lot of change and maturation. What do you see as some of the most notable ways that the business dynamics of solar have changed as the industry has evolved?

Shugar: The analogy I like to use is that you can think of the evolution of the solar industry as similar to how the automobile industry evolved. In the early days, when I was at PowerLight, our approach was kind of like Henry Ford.

When the automobile industry was super immature, it was characterized by thousands of manufacturers and unreliable, expensive products — sort of a mom-and-pop type industry. What Henry Ford did was create a standardized product and a standardized production system with few options. He radically reduced costs, improved reliability and made the technology more prevalent through a vertically integrated model.

That’s similar to where we were at PowerLight, circa 1996 through 2007. We had a vertically integrated approach. The logic of heavy vertical integration made a lot of sense back then, because the industry was in a very early place.

Today, the industry’s at a real scale and vertical integration no longer makes sense. You can’t be best in the world at everything when the industry is huge. Instead of making every component like Henry Ford did, modern car companies make a few components. They’re really focused on overall product design, brand, marketing, financing, etc. But then they have, for instance, an electronics company making the radios and a tire company making the tires and so forth, and they bring that together.

The solar industry today is coming to a similar point. With more companies specializing in specific areas, it doesn’t make sense to have precious management attention and capital spread over too many things. I think you need to pick your shots.

Be best in the world at one or a couple things, but don’t try to be best at everything. You can’t be the best O&M company, the best manufacturer, the best developer and do all those things at the same time.

Aurora: What areas of innovation do you think the industry should double-down on or start exploring to further drive down the cost of deploying solar energy?

Shugar: We’ve been really focused on software for that purpose. I love the idea that without building more hardware you can get more energy out of the system. As an environmentalist, I want the most to come out of every system that gets deployed.

At NEXTracker, we’ve commercialized an adaptive tracking algorithm that is really moving the needle from a yield standpoint on the software side. The gains aren’t giant numbers — it’s not going to double yield — but with our TrueCapture technology, we can achieve 2 to 6% yield improvement for typical sites. That is actually a huge amount if you’re doing structured finance projects.

Part of how that is accomplished is by optimizing yield on cloudy days, when you can actually produce 15 to 20% more energy by orienting the panels upward instead of tracking conventionally. We also developed improvements for undulating terrain. Instead of having all the trackers move in parallel like a Venetian blind — what we commercialized 20 years ago — we developed a way to have each row optimally change based on its geospatial position within the plant, using embedded sensors that establish its position relative to its neighbor. That can generate a lot more energy on an undulating site.

Just in the context of the fleet that we’ve delivered, these yield improvements are the equivalent of shutting down a couple coal plants worth of energy! I think even more can be done across the whole software category to wring more energy out of PV systems.

NEXTracker

Aurora: Early in your career, you co-authored research that demonstrated how siting solar in strategic locations on the grid could deliver cost savings to utilities. These findings contributed to the development of net metering policies. Even today, however, the idea that solar hurts utility profits or shifts costs to non-solar customers persists. What do you think it will take to overcome this misconception?

Shugar: Yes, we proved that PV distributed in the grid can provide a lot of benefits. The research was part of a national solar research project by the U.S. Department of Energy, co-funded by a number of utilities, called “Photovoltaic for Utility-Scale Applications (PV USA).” We were able to empirically document the benefits solar provides to the grid when it’s distributed at strategic locations. It’s also a fact that we were so successful in California that we actually have over ten gigawatts of solar and have changed the shape of the load curve of the fifth largest economy in the world. There’s still a lot of correlation in California, but it’s less perfect than when we conducted our research.

In terms of how we overcome misconceptions about solar’s benefits, if you look at the majority of solar being installed, which is utility scale or community solar, solar is about half the average cost of all other main forms of generation in sunny areas. We’re massively lowering the cost of wholesale power, saving consumers tens, maybe hundreds of millions of dollars annually. We need to get that message out better.

One way we’re doing this is through a national solar and wind job campaign tour we launched a year and a half ago, A Renewable America, with the Wind Solar Alliance. We’ve been doing a series of on-the-ground events, highlighting the jobs that have been created, and the savings and energy independence that solar and wind are providing customers. So it’s a very concrete, tangible thing.

Aurora: Something you’ve mentioned in the past as critical to a company’s success is the strength of the team and creating a dynamic that encourages innovation. What practices do you incorporate on a regular basis to cultivate that dynamic in the companies you’ve run?

Shugar: First, in terms of team dynamic, I think being really transparent with the mission of the company is key — why we’re here, why we’re all putting our energies in. It’s got to be bigger than just making money. For us, it’s always been mainstreaming solar.

From there, it’s important to define common goals and communicate them clearly so the team can align around them. In terms of processes at NEXTacker, and my prior companies, we do periodic strategic off-site [meetings] where we define what we want to accomplish in the coming year, and break that down into a quarterly cadence.

We share those objectives really actively with all staff and each person has their own milestone system that defines what they’re working on — they generate that. A benefit of that is that it engenders a valuable dialogue with their supervisor. Having that kind of framework is really helpful, especially as companies scale.

With respect to innovation, you must encourage people to take risks and try new things. We have an ethos at the company where folks know you’ve got their back. If somebody tries something new and it doesn’t work, that’s okay.

Additionally, allowing organic creation of ideas from anybody within the organization is really important, as well as expanding the universe in which ideas come from — especially to include customers.

We ask customers for feedback all the time. “What do you think of the product? What are your ideas? How would you like it improved? What other features and attributes would you like to see?” We really listen to what they say and evaluate those ideas. Some ideas won’t work, but some will. I could show our product and point to specific features that came from customers. And we go back to the customer and acknowledge them.

We also try to think strategically about how to strip out extraneous elements. Fundamentally, we’re trying to generate more energy at the lowest possible cost with the highest amount of reliability. Anything not contributing to that should go, and features that can enhance that goal should be brought in.

It doesn’t matter if you’re doing roof systems or ground mounted systems — having that kind of culture and format for ideas has worked across a variety of platforms.

NEXTracker

Aurora: Given the many successful companies you’ve been a part of, are there any lessons for success you’ve learned that you would like to share with our readers?

Shugar: A lot of it, I think, is just being very practical, keeping it real. For me, that starts with having a mission, like “we want solar to be the largest source of power,” and being able to articulate that.

From there, it’s about finding a way to add value to the customer and building an awesome team that’s mission-focused, to be able to deliver that value to the customer. It’s about making sure you do the basics super well.

In terms of having a functional team, you need a process by which issues are put forward. We have an expression [that goes] “bad news now.” We want to know what the real issues are and not conceal them but rather deal with them — whether it’s on the team or the product or the financial status of something. We want to address that practically and be able to manage expectations with the customer and follow through on our commitments.

I’m really passionate about relationships with customers and being honest. If there’s a problem with the product, or the schedule, or the delivery, be super up-front about what those issues are, and customers are generally understanding.

Aurora: In addition to your day job, you’re also a musician and you and your band Groovityperform around the Bay Area (and in the2018 Solar Battle of the Bandsat Intersolar)! How did this come about?

Shugar: The backstory about how I got into music is that when I was 16, I indicated to my father that I was interested in learning how to play guitar. His response was, “Get in the car, we’re going to the music store.”

It was just a basic guitar he got me, but what I took from that is when people indicate interest in something — I did this with my kids — you try to make it available. Sometimes, maybe most of the time, it doesn’t work out. But once in a while, it does. For me, music has been a source of great joy and satisfaction, and an opportunity to relate to people on a different level. It’s a lot of fun.

Music brings people together. That’s what we were trying to accomplish at Intersolar 2018, and I think we got it done.

For me, having a great company is really like having a band — there’s a direct analogy. Because you want to give every person space to contribute and you want to be really listening to what’s happening.

I think the thing that works most in our band is that everyone’s really carefully listening. That allows a fundamental structure but a high degree of improvisation that happens live, adapting as you go. When it’s time to say something, you say it, but then you pull back and let other people contribute and that makes the band — or company — that much more powerful. And it keeps it really interesting.

About The Author

Gwen Brown

Gwen Brown is content marketer at Aurora Solar, where she develops educational content for solar industry professionals including blogs, webinars and white papers. Prior to joining Aurora, Gwen was a Senior Research Associate at the Environmental Law Institute. She graduated Phi Beta Kappa from Gettysburg College, where she studied Environmental Studies and Political Science.